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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39539

 

PMV PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

46-3218129

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

One Research Way

Princeton, NJ

08540

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (609) 642-6670

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.00001

 

PMVP

 

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No ☐

As of November 7, 2023, the registrant had 51,157,636 shares of common stock, $0.00001 par value per share, outstanding.

 

 

 


 

Table of Contents

 

Page

PART I.

FINANCIAL INFORMATION

1

Item 1.

Condensed Financial Statements (Unaudited)

1

Condensed Balance Sheets (Unaudited)

1

Condensed Statements of Operations and Comprehensive Loss (Unaudited)

2

Condensed Statements of Stockholders’ Equity (Unaudited)

3

Condensed Statements of Cash Flows (Unaudited)

5

Notes to Unaudited Condensed Financial Statements

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

Controls and Procedures

23

PART II.

OTHER INFORMATION

24

Item 1.

Legal Proceedings

24

Item 1A.

Risk Factors

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

24

Item 3.

Defaults Upon Senior Securities

24

Item 4.

Mine Safety Disclosures

25

Item 5.

Other Information

25

Item 6.

Exhibits

26

Signatures

27

 

i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, development plans, planned preclinical studies and clinical trials, future results of clinical trials, expected research and development costs, regulatory strategy, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

our financial performance;
the sufficiency of our existing cash, cash equivalents and short-term marketable securities to fund our future operating expenses and capital expenditure requirements;
our need to raise additional funding before we can expect to generate any revenues from product sales;
our ability to obtain additional funding for our operations, when needed, including funding necessary to complete further development and commercialization of our product candidates, if approved;
the accuracy of our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
the implementation of our strategic plans for our business and product candidates;
the size of the market opportunity for our product candidates and our ability to maximize those opportunities;
the initiation, timing, progress and results of our research and development programs, preclinical studies, clinical trials and investigational new drug applications, or IND, and other regulatory submissions;
the beneficial characteristics, safety, efficacy and therapeutic effects of our product candidates;
our estimates of the number of patients for each of our programs including patients expected to have certain p53 mutations and the number of patients that will enroll in our clinical trials;
the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other favorable results;
our plans relating to the clinical development of our product candidates, including the disease areas to be evaluated;
the timing, progress and focus of our clinical trials, and the reporting of data from those trials;
our ability to obtain and maintain regulatory approval of our product candidates;
our plans relating to commercializing our product candidates, if approved;
the expected benefits of our existing and any potential future strategic collaborations with third parties and our ability to attract collaborators with development, regulatory and commercialization expertise;
the success of competing therapies that are or may become available;
the timing or likelihood of regulatory filings and approvals, including our expectation to seek accelerated reviews or special designations, such as breakthrough therapy and orphan drug designation, for our product candidates, including our intention to seek accelerated approval for PC14586, our lead product candidate, for a tumor-agnostic indication;
our plans relating to the further development and manufacturing of our product candidates, including for additional indications that we may pursue;
existing regulations and regulatory developments in the United States and other jurisdictions;
our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

ii


 

our plans to rely on third parties to conduct and support preclinical and clinical development;
our ability to retain the continued service of our key personnel and to identify, hire and then retain additional qualified personnel; and
the impact of the ongoing COVID-19 pandemic, geopolitical tensions such as the Ukraine-Russia war, macroeconomic events such as global supply chain challenges, elevated inflation and interest rates and monetary policy changes, or other potential global disruptions on our business.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the United States Securities and Exchange Commission on March 1, 2023, as well as in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

iii


 

PART I—FINANCIAL INFORMATION

Item 1. Condensed Financial Statements (Unaudited).

PMV Pharmaceuticals, Inc.

Condensed Balance Sheets

(unaudited)

(in thousands, except share and per share amounts)

 

 

 

September 30,
2023
(unaudited)

 

 

December 31,
2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

52,057

 

 

$

108,297

 

Restricted cash

 

 

822

 

 

 

822

 

Marketable securities, current

 

 

149,861

 

 

 

132,757

 

Prepaid expenses and other current assets

 

 

2,556

 

 

 

5,130

 

Total current assets

 

 

205,296

 

 

 

247,006

 

Property and equipment, net

 

 

10,822

 

 

 

10,955

 

Marketable securities, noncurrent

 

 

36,184

 

 

 

2,495

 

Right-of-use assets

 

 

8,545

 

 

 

9,539

 

Other assets

 

 

180

 

 

 

313

 

Total assets

 

$

261,027

 

 

$

270,308

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,678

 

 

$

2,996

 

Accrued expenses

 

 

9,038

 

 

 

7,308

 

Operating lease liabilities, current

 

 

 

 

 

528

 

Total current liabilities

 

 

10,716

 

 

 

10,832

 

Operating lease liabilities, noncurrent

 

 

12,699

 

 

 

13,448

 

Total liabilities

 

 

23,415

 

 

 

24,280

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.00001 par value, 5,000,000 shares authorized at September 30, 2023 and December 31, 2022. No shares issued or outstanding at September 30, 2023 and December 31, 2022.

 

 

 

 

 

 

Common stock, $0.00001 par value, 1,000,000,000 shares authorized; 51,157,636 and 45,771,332 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively.

 

 

 

 

 

 

Additional paid-in capital

 

 

532,214

 

 

 

487,516

 

Accumulated deficit

 

 

(294,247

)

 

 

(241,043

)

Accumulated other comprehensive loss

 

 

(355

)

 

 

(445

)

Total stockholders’ equity

 

 

237,612

 

 

 

246,028

 

Total liabilities and stockholders’ equity

 

$

261,027

 

 

$

270,308

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

1


 

PMV Pharmaceuticals, Inc.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share amounts)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

13,586

 

 

$

13,666

 

 

$

42,503

 

 

$

36,963

 

General and administrative

 

 

6,042

 

 

 

5,709

 

 

 

18,727

 

 

 

18,915

 

Total operating expenses

 

 

19,628

 

 

 

19,375

 

 

 

61,230

 

 

 

55,878

 

Loss from operations

 

 

(19,628

)

 

 

(19,375

)

 

 

(61,230

)

 

 

(55,878

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income, net

 

 

2,984

 

 

 

1,124

 

 

 

8,005

 

 

 

1,830

 

Other income (expense), net

 

 

4

 

 

 

13

 

 

 

24

 

 

 

67

 

Total other income (expense)

 

 

2,988

 

 

 

1,137

 

 

 

8,029

 

 

 

1,897

 

Loss before (benefit) provision for income taxes

 

 

(16,640

)

 

 

(18,238

)

 

 

(53,201

)

 

 

(53,981

)

(Benefit) provision for income taxes

 

 

 

 

 

(9

)

 

 

3

 

 

 

(9

)

Net loss

 

 

(16,640

)

 

 

(18,229

)

 

 

(53,204

)

 

 

(53,972

)

Unrealized (loss) gain on available for sale investments, net of tax

 

 

(27

)

 

 

(2

)

 

 

90

 

 

 

(947

)

Comprehensive loss

 

$

(16,667

)

 

$

(18,231

)

 

$

(53,114

)

 

$

(54,919

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share -- basic and diluted

 

$

(0.34

)

 

$

(0.40

)

 

$

(1.13

)

 

$

(1.18

)

Weighted-average common shares outstanding

 

 

49,047,296

 

 

 

45,622,957

 

 

 

46,889,921

 

 

 

45,556,635

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

2


 

PMV Pharmaceuticals, Inc.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share amounts)

 

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2021

 

 

 

45,433,684

 

 

$

 

 

$

476,363

 

 

$

(78

)

 

$

(167,726

)

 

$

308,559

 

Exercise of stock options

 

 

 

98,708

 

 

 

 

 

 

128

 

 

 

 

 

 

 

 

 

128

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

2,177

 

 

 

 

 

 

 

 

 

2,177

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,433

)

 

 

(18,433

)

Unrealized loss on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

(588

)

 

 

 

 

 

(588

)

Balance at March 31, 2022

 

 

 

45,532,392

 

 

$

 

 

$

478,668

 

 

$

(666

)

 

$

(186,159

)

 

$

291,843

 

Exercise of stock options

 

 

 

90,218

 

 

 

 

 

 

276

 

 

 

 

 

 

 

 

 

276

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

2,518

 

 

 

 

 

 

 

 

 

2,518

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,310

)

 

 

(17,310

)

Unrealized loss on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

(357

)

 

 

 

 

 

(357

)

Balance at June 30, 2022

 

 

 

45,622,610

 

 

$

 

 

$

481,462

 

 

$

(1,023

)

 

$

(203,469

)

 

$

276,970

 

Exercise of stock options

 

 

 

2,250

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

6

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

2,448

 

 

 

 

 

 

 

 

 

2,448

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18,229

)

 

 

(18,229

)

Unrealized loss on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

(2

)

Balance at September 30, 2022

 

 

 

45,624,860

 

 

$

 

 

$

483,916

 

 

$

(1,025

)

 

$

(221,698

)

 

$

261,193

 

 

3


 

 

 

 

 

Common Stock

 

 

Additional
Paid-in

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders'

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at December 31, 2022

 

 

 

45,771,332

 

 

$

 

 

$

487,516

 

 

$

(445

)

 

$

(241,043

)

 

$

246,028

 

Exercise of stock options

 

 

 

3,429

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

12

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

2,932

 

 

 

 

 

 

 

 

 

2,932

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(19,128

)

 

 

(19,128

)

Unrealized gain on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

329

 

 

 

 

 

 

329

 

Balance at March 31, 2023

 

 

 

45,774,761

 

 

$

 

 

$

490,460

 

 

$

(116

)

 

$

(260,171

)

 

$

230,173

 

Exercise of stock options

 

 

 

24,417

 

 

 

 

 

 

105

 

 

 

 

 

 

 

 

 

105

 

Issuance of common stock, net of issuance costs

 

 

 

344,358

 

 

 

 

 

 

2,026

 

 

 

 

 

 

 

 

 

2,026

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

3,153

 

 

 

 

 

 

 

 

 

3,153

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,436

)

 

 

(17,436

)

Unrealized loss on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

(212

)

 

 

 

 

 

(212

)

Balance at June 30, 2023

 

 

 

46,143,536

 

 

$

 

 

$

495,744

 

 

$

(328

)

 

$

(277,607

)

 

$

217,809

 

Exercise of stock options

 

 

 

209,012

 

 

 

 

 

 

51

 

 

 

 

 

 

 

 

 

51

 

Issuance of common stock, net of issuance costs

 

 

 

4,805,088

 

 

 

 

 

 

33,095

 

 

 

 

 

 

 

 

 

33,095

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

3,324

 

 

 

 

 

 

 

 

 

3,324

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(16,640

)

 

 

(16,640

)

Unrealized loss on available for sale investments

 

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

Balance at September 30, 2023

 

 

 

51,157,636

 

 

$

 

 

$

532,214

 

 

$

(355

)

 

$

(294,247

)

 

$

237,612

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

4


 

PMV Pharmaceuticals, Inc.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(53,204

)

 

$

(53,972

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

9,409

 

 

 

7,143

 

Depreciation

 

 

898

 

 

 

240

 

(Accretion) of premiums on marketable securities

 

 

(3,511

)

 

 

(102

)

Non-cash lease (income) expense

 

 

(283

)

 

 

250

 

Other, net

 

 

 

 

 

(86

)

Change in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

2,707

 

 

 

(2,196

)

Operating lease right-of-use assets and liabilities

 

 

 

 

 

1,611

 

Accounts payable

 

 

(1,318

)

 

 

867

 

Accrued expenses

 

 

1,730

 

 

 

(2,191

)

Net cash used in operating activities

 

 

(43,572

)

 

 

(48,436

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(765

)

 

 

(6,346

)

Purchases of marketable securities

 

 

(187,147

)

 

 

(194,512

)

Maturities of marketable securities

 

 

139,955

 

 

 

176,267

 

Net cash used in investing activities

 

 

(47,957

)

 

 

(24,591

)

Cash flows from financing activities:

 

 

 

 

 

 

Issuance of common stock, net of issuance costs

 

 

35,121

 

 

 

 

Proceeds from the exercise of stock options

 

 

168

 

 

 

410

 

Net cash provided by financing activities

 

 

35,289

 

 

 

410

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(56,240

)

 

 

(72,617

)

Cash, cash equivalents, and restricted cash

 

 

 

 

 

 

Cash, cash equivalents, and restricted cash - beginning of period

 

 

109,119

 

 

 

173,289

 

Cash, cash equivalents, and restricted cash - end of period

 

$

52,879

 

 

$

100,672

 

Supplemental disclosures of noncash investing activities

 

 

 

 

 

 

Accrued purchases of property and equipment

 

$

 

 

$

770

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

5


 

PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

1. Formation and Business of the Company

Organization and Liquidity

PMV Pharmaceuticals, Inc. (the “Company” or “We”) was incorporated in the state of Delaware in March 2013. Since inception, the Company has devoted substantially all of its time and efforts to performing research and development activities and raising capital. We are a precision oncology company pioneering the discovery and development of small molecule, tumor-agnostic therapies targeting p53. The Company’s headquarters are located at One Research Way, Princeton, New Jersey.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry including, but not limited to, technical risks associated with the successful research, development and manufacturing of product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Current and future programs will require significant research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, and infrastructure. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

The Company has incurred net losses and negative cash flows from operations since its inception. During the three and nine months ended September 30, 2023, the Company incurred a net loss of $16,640 and $53,204, respectively. For the nine months ended September 30, 2023, the Company used $43,572 of cash for operations. At September 30, 2023, the Company had an accumulated deficit of $294,247. Cash, cash equivalents, and marketable securities were $238,102 as of September 30, 2023. Management expects to incur substantial additional operating losses for the next several years and may need to obtain additional debt or equity financings in order to complete development of its products, obtain regulatory approvals, launch and commercialize its products and continue research and development programs. The Company believes it has adequate cash, cash equivalents, and marketable securities to operate for the next 12 months from the date of issuance of these financial statements.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) on March 1, 2023. Since the date of those financial statements, there have been no changes to its significant accounting policies.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the interim period reporting requirements of Form 10-Q and Article 10 of Regulation S-X. The condensed balance sheet as of September 30, 2023, the condensed statements of operations and comprehensive loss and condensed statements of stockholders’ equity for the three and nine months ended September 30, 2023 and 2022, and the condensed statements of cash flows for the nine months ended September 30, 2023 and 2022, are unaudited, but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for any interim period are not necessarily indicative of results for the year ending December 31, 2023, or for any other subsequent interim period. The condensed balance sheet as of December 31, 2022, has been derived from our audited financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. Significant estimates and assumptions reflected in these financial statements include, but

6


PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

are not limited to, research and development costs, accrued research and development costs and related prepaid expenses and stock-based compensation. Actual results could differ materially from those estimates.

Cash, Cash Equivalents and Marketable Securities

Management considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

The Company’s marketable debt securities have been classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Marketable debt securities with maturities of 12 months or less are classified as short-term and marketable debt securities with maturities greater than 12 months are classified as long-term. The Company’s marketable debt securities are carried at fair value, with unrealized gains and losses, net of taxes, reported as a component of accumulated other comprehensive loss in stockholders’ equity. Premiums and discounts on marketable debt securities are amortized into earnings over the life of the security and recorded on the interest income, net line of the income statement. For the three months ended September 30, 2023 and 2022, the Company recorded $1,840 and $228 of accretion, respectively. For the nine months ended September 30, 2023 and 2022, the Company recorded $3,511 and $102 of accretion, respectively.

Restricted cash as of September 30, 2023 and December 31, 2022 included a $822 deposit at the Company’s commercial bank underlying a stand-by letter of credit issued in favor of a landlord (See Note 6) and is classified in current assets.

Comprehensive Loss

The Company presents comprehensive loss in a single statement within its financial statements. Other comprehensive loss consists of unrealized gains and losses on marketable securities, net of tax.

Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the circumstances present. The Company accounts for a contract as a lease when it has the right to control the asset for a period of time while obtaining substantially all of the asset’s economic benefits. The Company determines the initial classification and measurement of its operating right-of-use (“ROU”) assets and operating lease liabilities at the lease commencement date, and thereafter if modified. The lease term includes any renewal options that the Company is reasonably certain to exercise. The Company’s policy is to not record leases with a lease term of 12 months or less on its balance sheets. The Company’s only existing leases are for office and laboratory space.

The ROU asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease. The present value of lease payments is determined by using the interest rate implicit in the lease, if that rate is readily determinable; otherwise, the Company uses its estimated secured incremental borrowing rate for that lease term.

Lease expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in operating expense in the statements of operations.

Payments due under each lease agreement include fixed and variable payments. Variable payments relate to the Company’s share of the lessor’s operating costs associated with the underlying asset and are recognized when the event on which those payments are assessed occurs. Variable payments have been excluded from the lease liability and associated right-of-use asset. Neither of the Company’s leases contain residual value guarantees.

The interest rate implicit in lease agreements is typically not readily determinable, and as such, the Company utilizes the incremental borrowing rate to calculate lease liabilities, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash, cash equivalents, and marketable securities. Cash and cash equivalents were held at two financial institutions. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash

7


PMV Pharmaceuticals, Inc.

Notes to Condensed Financial Statements

(unaudited)

(in thousands, except share and per share amounts)

equivalents. The Company’s marketable securities are carried at fair value and include any unrealized gains and losses. Any investments with unrealized losses are considered to be temporarily impaired.

The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, uncertainty of market acceptance of the product, competition from substitute products and larger companies, protection of proprietary technology, any future strategic relationships and dependence on key individuals.

Products developed by the Company require clearances from the U.S. Food and Drug Administration or other international regulatory agencies prior to commercial sales. There can be no assurance the Company’s product candidates will receive the necessary clearances. If the Company is denied clearance, clearance is delayed or it is unable to maintain clearance, it could have a materially adverse impact on the Company.

3. Fair Value Measurements

The Company’s financial assets consist of money market funds, U.S. government debt securities and corporate debt securities. The following tables show the Company’s cash equivalents and available-for-sale securities’ carrying amounts and fair values as of September 30, 2023, and December 31, 2022:

 

 

 

As of September 30, 2023

 

 

 

Carrying
Amount

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Fair
Value

 

 

Quoted
priced in
active
markets
(Level 1)

 

 

Significant
other
observable
inputs
(Level 2)

 

 

Significant
unobservable
inputs
(Level 3)

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

51,803

 

 

$

 

 

$

 

 

$

51,803

 

 

$

51,803

 

 

$

 

 

$

 

Corporate securities

 

 

76,176

 

 

 

 

 

 

(107

)

 

 

76,069

 

 

 

2,931

 

 

 

73,138

 

 

 

 

Government securities

 

 

110,223

 

 

 

 

 

 

(247

)

 

 

109,976

 

 

 

89,023

 

 

 

20,953

 

 

 

 

Total financial assets

 

$

238,202

 

 

$

 

 

$

(354

)

 

$

237,848

 

 

$

143,757

 

 

$

94,091

 

 

$

 

 

 

 

 

As of December 31, 2022

 

 

 

Carrying
Amount

 

 

Gross Unrealized Gains

 

 

Gross Unrealized Losses

 

 

Fair
Value

 

 

Quoted
Priced in
Active
Markets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Financial assets